It's a relative font metric. 1em means use the browser's default size, while .5em means use half the browser's default size. The default size is usually 16px, unless changed by some other CSS on the site.
Well there you go, and here is me thinking that it related to the width of the M (em) of the current font and size. If no units have been set then the current width of the M in a browser is 16px hence 1em=16px. Change the font type and size, then also M (em) will change and may no longer represent 16px;